Don’t forget: The coming death-tax dropkick

posted at 5:41 pm on December 10, 2012 by Erika Johnsen

Part of the upcoming “Forward, over the fiscal cliff!”-scenario we’re potentially looking at includes a big hike in estate taxes (or, as they’re perhaps more aptly called, death taxes). Currently, the estate tax is applied to inherited assets at 35 percent after a $5 million exemption; most Republicans and even a mix of Democrats are in favor of lessening or eliminating the death tax altogether, but if President Obama gets the tax deal he wants, estate taxes will go up to 45 percent after a $3.5 million exemption.

In the event of neither a Bush-era extension nor President Obama’s plan, however, going over the cliff means that the estate tax shoots back up to the pre-Bush level of 55 percent after a $1 million exemption — and that has disastrous implications for our economy (which is just great, because we clearly don’t have enough disastrous economic implications looming over our heads already). The effect of heightened estate taxes on small businesses, farms, and ranches is brutal, as Heritage outlines in the video below, and provides ample explanation for why many rural Democrats are against the idea.

And as for the wider incentives on all Americans to earn, be frugal, and accumulate wealth? Milton Friedman breaks that one down better than I ever could:

Katie Pavlich reports that a group of progressive billionaires are going to be touting the ostensible benefits of a healthy estate tax tomorrow, which President Obama will no doubt use as more fodder for his, “See? Business leaders like my plans!”-nonstop campaign… which so far seems to be working out pretty well for him.

In the event of neither a Bush-era extension nor President Obama’s plan, however, going over the cliff means that the estate tax shoots back up to the pre-Bush level of 55 percent after a $1 million exemption — and that has disastrous implications for our economy (which is just great, because we clearly don’t have enough disastrous economic implications looming over our heads already).

So what percentage of small businesses will be affected by an estate tax? I am comfortably middle class and been associated with small businesses most of my adult life – and yet I have not come across a small business owner who owns an estate worth more than $1 million. Not saying that there are not any – but those who do are probably not any significant portion of the small business owners in this country.

This is the dirty little secret about all this tax the rich rhetoric. The rich, truly wealthy, have mobility and the ability to shelter their wealth. Just look at England. They raised taxes on millionaires, and 2/3 of the millionaires disappeared. left.

The effect of heightened estate taxes on small businesses, farms, and ranches is brutal, as Heritage outlines in the video below, and provides ample explanation for why many rural Democrats are against the idea.

Doesn’t matter. It’s going to happen. Barry has the wind at his back and a following sea.

Friedman video was pretty brilliant. The contrast between Friedman and his antagonist revealed the belligerence of progressives like a spotlight shining on it. That’s Obama, Hillary — one spoiled and ridiculous brat after another spouting glorified stupidity with hauteur no one would believe if they hadn’t seen it.

This is the dirty little secret about all this tax the rich rhetoric. The rich, truly wealthy, have mobility and the ability to shelter their wealth. Just look at England. They raised taxes on millionaires, and 2/3 of the millionaires disappeared. left.

tom daschle concerned on December 10, 2012 at 6:02 PM

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

What is this rumor I am hearing that Obama wants to be sworn in in private? Can that be true?

Cindy Munford on December 10, 2012 at 6:11 PM

Because next year’s inauguration falls on a Sunday, President Obama will hold only a small, private swearing-in ceremony on Jan. 20, and will hold a big public redo the next day.

The Inaugural Committee announced Thursday that activities will last three days: a day of service on Saturday, the small private ceremony on Sunday, and the public swearing-in, parade and balls on Monday.

The committee said that the small ceremony is a tradition for inaugurations that fall on Sundays.

It will be the second time Mr. Obama has had two swearing-in ceremonies, after Chief Justice John G. Roberts Jr. botched the oath in 2009, leading them to hold a do-over in the White House.

The master Kenyan’s never had a job producing anything, never ran a business and never met payroll. Never done a day’s work in his life.

However, his brother in Kenya is squatting in some mud hut wiping his rear with his hand and beating his wife and cutting off his daughter’s genitals preaching the “religion of peace” and sharia law to any female stupid enough to listen and believe it.

The shock is that we, as a nation, are shocked about anything this clown does.

i have a better idea. Anyone with wealth over say 500M has to match dollar for dollar any charitable contribution with a payment to the government. Then, at death, the estate would be taxed at 50 percent

That Gates/Buffet et al. give away 10s of billions is actually immoral when considering the debt we are leaving to the future

I guess Obummer was just lucky his grandma ( you know that typical old white woman he referred to)died before he became Prez. so he didn’t have to pay this big death tax when he inherited that 500M.
But according to him his mother was so poor she was on food stamps and died because she couldn’t afford health insurance, Grandma had plenty and didn’t take care of her only child????
Just another fairytale.

Not saying that there are not any – but those who do are probably not any significant portion of the small business owners in this country.

peter_griffin on December 10, 2012 at 5:56 PM

You may want to get out more. I am a one man gang that is currently swamped with work to get appraisals done, due diligence on mineral assets, etc. as families are dumping properties or setting up trusts to deal with what is coming. My son’s in-laws are farmers with about 1,000 acres of land owned for decades that they farm. These kids can’t afford to pay for the tax when they die.

I have a client with almost 1,000 acres in Harris County that is predomonintly undeveloped. The father lived the depression and bought contiguous tracts for years. They are what you would call land rich and cash poor. He still lives in the house he built in 1961.

The Josey Oil Co. in Houston was nearly ruined because they had leveraged land titles for oil field development. When their mother died it was before the current estate taxes were in place and the sons got absolutely hammered because of the false values placed on their land by encroaching development near their land.

There are plenty of families that have ag land that has gone up in value yet they have no intention of selling because they own it and always have. This takes away the option of holding it for future generations.

Texas is loaded with examples of this as I bet many other states are too. The estate tax is going to plunder all the security families in the Eagle Ford and Permian plays are reaping and for what? To pay for Illinois and California fiscal mismanagement?

What is this rumor I am hearing that Obama wants to be sworn in in private? Can that be true?

Cindy Munford on December 10, 2012 at 6:11 PM

Not a rumor.

He wants 2 swearing in ceremonies.

BobMbx on December 10, 2012 at 6:12 PM

Well it’s only the weak cowardly moderates in the Chinese Communist Party that are cutting back on the pomp and self-aggrandizement. Has nothing to do with our General Secretary. Huh…he’s still using “President.” How quaint.

Our local news just reported about a $63 a person unexpected fee in effect on 2014.

Doubt employers will be paying that.

gophergirl on December 10, 2012 at 6:25 PM

Thats the new personal carbon tax. For $63.00, you get a license to breathe. If you get pulled over and don’t have said license, the LOE is authorized to plastic-bag your head and transport you to the nearest breathing permit office.

from several days ago…not an easy read. Compares the barry admin with, well, the UK royals.

did you know that the WH has 2 f/t film projectionists…and a f/t dog walker

i don’t know if Steyn is total correct about the projectionists. They could be A/V people that attend to vcrs etc. I worked in a union environment at one point and we have to have an offical A/V person come out and set stuff up etc. (that was in the days of VHS…long time ago)

I wonder if Fredmans observation is still true. Do parents still value the ability to give their children a better life? Mothers and fathers are choosing not to form families. Parents are keeping their children from reading. Women are having children based on benefit calculations.

The larger question is, if Americans really are willing to live for the moment, is there any hope of addresing problems they see as affecting the future?

So what percentage of small businesses will be affected by an estate tax? I am comfortably middle class and been associated with small businesses most of my adult life – and yet I have not come across a small business owner who owns an estate worth more than $1 million. Not saying that there are not any – but those who do are probably not any significant portion of the small business owners in this country.

peter_griffin on December 10, 2012 at 5:56 PM

Come out to Colorado – or anywhere with a large base of family farming or ranching. A very small ranch of 1000 acres (and that is very small for ranch land) that’s within commuting distance of any major city is easily worth $5000 per acre on the low end (likely much more). That means that small time ranch can be easily appraised by a gubmint appraiser at $5 Million value without even considering buildings, vehicles, and other parts of the business (existing stock, feed stocks, etc). If this death tax increase goes through, look for lots more family farms and ranches to get sold off to developers and farm/ranch conglomerate corporations when the old man who has run it his entire life dies.

So what percentage of small businesses will be affected by an estate tax? I am comfortably middle class and been associated with small businesses most of my adult life – and yet I have not come across a small business owner who owns an estate worth more than $1 million. Not saying that there are not any – but those who do are probably not any significant portion of the small business owners in this country.

peter_griffin on December 10, 2012 at 5:56 PM

One specific example out here near Colorado Springs – Dragon Man.
He has about 1000 acres (I think) with cattle ranch, machine shop, a Class III arms dealership, a military history museum, at least 5 acres of paintball fields, a dirt bike track, and multiple shooting ranges – all easily worth $10 Million or more because of land and improvements values. He employs at least a dozen people (probably more), a lot of which are family. If anything happens to him, the whole thing is gone because of taxes unless he has it set up right (which he probably does – he’s a smart guy and very anti-Dem).

I had a hunch, so I went to look and low and behold that is the day of the NFL championship games the determine those who will play in the Super Bowl. He doesn’t want to compete, because he knows he can’t.

… the Trillion dollar parade in his honor will be on Monday, with a repeat performance for the masses.

I’m pretty sure that is when he informs us of the Executive Orders he has in his pocket…

Seven Percent Solution on December 10, 2012 at 6:17 PM

Is it possible for Obysmal to have another “day of service” after the costly celebration for his fan-club attendees to clean up their mess instead of having more federal dollars spent by the park service?

This has really upset my parents more than anything. All the seven days a week long hours risk and investment in a buisiness built over 45 years. They give you nine months to get the tax paid and trying to hang on to real estate when the banks wont lend against it in an economic downturn is another huge issue. Watching our country go down the toilet for what?

Yes, because Obama will be very interested in working with Republicans to create a bipartisan solution that will be in the best interest of all involved.

Or he will slander, vilify, threaten, and wallow in petulance offering nothing but obviously disastrous proposals and rejecting any input from those outside his circle of extreme leftists, while enjoying the use of the strongest media propaganda machine since Goebbels blew his brains out to paint the GOP and any of their counterproposals as laughable and racist.

Thanks for this information, I stand corrected. I have had friends of friends who live in Texas, and are, as a previous commenter said, “land rich and cash poor”. I can see their predicament – they do own a lot of resources in the form of land, but they don’t have the cash needed to hold on to it. In an eerie parallel, there have been moves throughout the developing world (specially India and China) regarding land grab by the government under the guise of economic development (they are called “Special Economic Zones” or SEZ’s in short). It seems there is a global move to getting land into the hand of conglomerates or government, for purported industrial development. We do live in interesting times…